3. Comparing salaries from different timesConsider golfers who led the Professional Golfers' Association of America (PGA) in winnings at different points in time. Note that the winnings arenominal figures (unadjusted for inflation).To convert the original earnings of Nicklaus, Trevino, and Stadler, use the formula for converting dollar figures from an earlier era into year 2017 U.S.dollars. Using those figures, fill in the following table, making sure to round your responses to the nearest U.S. dollar.Nominal WinningsYearGolfer(Dollars)U.S. CPI(1983 = 100)Winnings in 2017 Dollars1965Jack Nicklaus140,75231.51970Lee Trevino157,03738.81982Craig Stadler446,46296.52017Justin Thomas9,921,560245.19,921,560True or False: According to the previous table, the golfer with the highest PGA winnings in nominal dollars is not the same as the golfer with thehighest PGA winnings after adjusting for inflation.TrueFalseGrade It NowSave & Continue

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Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter22: Inflation

Section: Chapter Questions

Problem 34P: The total price of purchasing a basket of goods in the United Kingdom over four years is: year...

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Adjusting for inflation:
3 Q nominal figures (unadjusted for inflation). To convert the original earnings of Nelson, Miller, and Kite, use the formula for converting dollar figures from an earlier era into year 2016 U.S. dollars. Using those figures, fill in the following table, making sure to round your responses to the nearest U.S. dollar. Year 1945 1974 1981 Golfer Byron Nelson Johnny Miller Tom Kite 2016 Dustin Johnson True Nominal Winnings False (Dollars) 63,336 353,022 375,699 9,365,185 U.S. CPI (1983 = 100) 49.3 90.9 240.0 Winnings in 2016 Dollars True or False: According to the previous table, the golfer with the highest PGA winnings in nominal dollars is not the same as the golfer with the highest PGA winnings after adjusting for inflation. 9,365,185
Q3.The amount of sugar produced in a sugar factory decreases by eight percent annually during the years 1401 to 1405. As a result, the amount of water consumed each year is ninety-two percent of the previous year. Suppose the cost of factory water consumption in 1401 is $ 80,000. With the annual inflation rate of twelve percent, get the current value of the factory water consumption. Use a payment set with a geometric slope to calculate the current value.
Suppose Dalia is a sports fan and buys only football tickets. Dalia deposits $2,000 into a savings account that pays an annual nominal interest rate of 20%. Assume this interest rate is fixed, and so it will not change over time. On the day she makes her deposit, suppose that a football ticket has a price of $20.00. Initially, Dalia's $2,000 deposit has a purchasing power of football tickets. For each of the annual inflation rates given in the following table, first determine the new price of a football ticket, assuming it rises at the rate of inflation. Then enter the corresponding purchasing power of Dalia's deposit after one year in the first row of the table for each inflation rate. Finally, enter the value for the real interest rate at each of the given inflation rates. Hint: Round your answers in the first row down to the nearest football ticket. For example, if you find that the deposit will cover 20.7 football tickets, you would round the purchasing power down to 20 football…
Suppose Dalia is a sports fan and buys only football tickets. Dalia deposits $4,000 into a savings account that pays an annual nominal interest rate of 5%. Assume this interest rate is fixed, and so it will not change over time. On the day she makes her deposit, suppose that a football ticket has a price of $10.00. Initially, Dalia's $4,000 deposit has a purchasing power of football tickets. For each of the annual inflation rates given in the following table, first determine the new price of a football ticket, assuming it rises at the rate of inflation. Then enter the corresponding purchasing power of Dalla's deposit after one year in the first row of the table for each inflation rate. Finally, enter the value for the real interest rate at each of the given inflation rates. Hint: Round your answers in the first row down to the nearest football ticket. For example, if you find that the deposit will cover 20.7 football tickets, you would round the purchasing power down to 20 football…
To convert the original earnings of Casper, NMiller, and Pavin, use the formula for converting dollar figures from an earlier era into year 2016 U.S. dollars. Using those figures, Ai in the following table, making sure to round your responses to the nearest U.S. dollar. Nominal Winnings U.S. CPI (1983- 100) Winnings in 2016 Dollars Year Golfer (Dollars) 1968 Billy Casper 205,169 34.8 1974 Johnny Miller 353,022 49.3 1991 Corey Pavin 979,430 136.2 2016 Dustin Johnson 9,365,185 240.0 9,365,165 True or False: According to the previous table, the golfer with the highest PGA winnings in nominal dollars is not the same as the golfer with the highest PGA winnings after adjusting for inflation, O True O False
Congratulations! Your boss has given you a raise. However, you want to know whether your purchasing power has increased, since inflation is also rising. The table below gives you data for wages and the Consumer Price Index (CPI) for the last two years. Wage ($/day) CPI Year 1 $ 2000 CPI 120 Year 2 $2200 CPI 129.6 The nominal percentage increase in your wage is enter your response here%. (Round your answer to one decimal place.) Part 2 The real percentage increase in your wage is enter your response here%. (Round your answer to one decimal place.)
Congratulations! Your boss has given you a raise. However, you want to know whether your purchasing power has actually increased, since inflation is rising as well. The table below gives you data for wages and the Consumer Price Index (CPI) for the last two years. Year 1 Year 2 Wage ($/day) $2,000 $2,100 The nominal percentage increase in your wage is%. (Round your answer to one decimal place.) The real percentage increase in your wage is%. (Round your answer to one decimal place.) CPI 115 128.8
Problem 3: Again, consider the country of Opalia that produces two goods: footballs and basketballs. Below is a table showing prices and quantities of common consumer purchases for the past three years: Price of Footballs Price of Basketballs Qd Footballs Qd Basketballs Year Year 1 10 12 33 4 Year 2 12 4 15 Year 3 18 14 a) Compute the CPI index (using year 1 as the base). b) Compute the inflation rate. c) Compare the answer to part b) and the answer you found for problem 1, part d)? What is the origin of the difference?
The following table pertains to Pieway, an economy in which the typical consumer's basket consists of 15 bushels of apples and 7 bushels of almond . Year Price of Apples (Dollars per bushel) Price of Almond (Dollars per bushel) Year 1 12 5 Year 2 9 11 Refer to Table 24-1. If Year 1 is the base year, then the inflation rate in Year 2 was
Lynda and Tom have data on the nominal price of a liter of milk in Germany in 1990 and 2010, respectively. They would like to calculate the present increase in the real price of milk over this time interval. To this end, Lynda uses a consumer price index (CPI) with the base year set at 1995 and Tom uses a CPI with the base year set at 2005. There was positive inflation between 1995 and 2005 of 3%. Based on this, it can be concluded:a) Tom and Lynda will reach the same calculation of the percentage increase in the real price of milkb) nothing can be concluded about their calculations without knowing the growth rate of real GDP between 1990 and 2010c) the nominal price of milk decreased between that 2 yearsd) Tom’s calculation of the percentage increase in the real price of milk will be higher than Lynda’se) Lynda’s calculation of the percentage increase in the real price of milk will be higher than Tom’s

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